Background of the study
The challenges of funds management in finance function, usually at a managerial level through which the firm’s financial resources are harnessed and allocated in the Nigeria local government system. The subject of financial management is of immense interest of those in academic and practicing managers because it provides them understanding with conceptual and analysis insights to make decision skillfully. Due to scarcity to resource financial management is arguable the most, critical and intractable of the problem which constrained the performance and development of local government in Nigeria and which Lokoja local government is not an exception inadequate financial resources has hampered development of Lokoja local government and this has always remained a log on her wheel of development. This coupled with other problems have made immense contributions to the low performance of the local government. Esun (2013).The aim of this study is to know and evaluate the challenges of fund management in the Nigeria local government system most especially Lokoja government council. Also to minimize the identified problem in order to enhance the standard of living of the local citizens. Local government is the third tier and government that are responsible for administration at the grassroots level. According to Lock (1988), local government is public organization authorized to dividend and administers a limited range of policies within a relative and small territory which is a sub-division of regional or national government. Therefore, local government has been considered desirable as essential instrument of national and state government for the performance of some certain basic services, like introduction and distribution of goods and services such as areas of health care, education, agricultural extension, social welfare, security and market which can best administered healthy or intimate knowledge of needs condition and peculiarity of the area concerned. The 1979 constitution guideline formed an important landmark in the evaluation of local government in Nigeria. The reform therefore saw the emergence of uniform structure of local government. The committee considered the accounting and financial management system for the new local government that had emerged. The accounting system consist of financial memorandum not be adopted on a nationwide basis by all the local government in the country. Fund serves as changes in financial resources, arising from change in working capital items and form financial investing activities of enterprise. According to Akinsunsmi (1986). Money receive as payment income especially that of a country from all sources. Revenue is defined as all tools, taxes impress rates, fees duties, penalties, prefecture, and loans rent allocation and all other government receipts from whatever source over which the legislature has power for appropriation. Okowoli (1988).Champber dictionary defined it as additional asset which do not increase any liability of such additional to asset which should not represent the recovery of an expenditure or their conciliating of any liability or decrease in assets.
1.2 STATEMENT OF THE PROBLEM
Owing to the immense responsibility of the government to provide service and infrastructure for its citizens, financing of these project, poses a great challenge to the government thus a crucial need to raise fund in order to meet the mandate of the people.The financial problem of the local government, Lokoja in particular falls under three areas.
1. How to keep the money
2. How to utilize the money
Finance as we know too well is heart of activities of government. Government unit at all level, national state and local level are daily engaged in the provision of social services in areas of health care, education, agriculture extension, social services or welfare, security all of which involve money.Inadequacy in financial management is arguably the most critical and intractable of the problem which constrained or limit the performance and development of local government in Nigeria and which Lokoja local government is not an exception inadequate financial resources has hampered Lokoja local government and thus has always remained a log on her wheel of development.Most of the militating against rapid development of Lokoja local government totally has been characterized by poor financial management by revenue officers, revenue collections and administration tend to contribute to the problem of financial management, corruption on the part of the revenue officers, inefficiency, favourtism, lack of qualified personnel, tax evasion sectionalism and embezzlement.This coupled with other problems have made immense contribution to the low performance of the Lokoja local government. This financial problems needs to be identified, discussed and improvement should be made upon if the local government is to serves on effective instrument of government at the grass root level. Adedeji (2003).
1.3 OBJECTIVE OF THE STUDY
The purpose of the study is to evaluate the financial management (funds) base of local government most particularly Lokoja local government whether at level of different ways of managing the much needed funds for development.
However, the study has the following specific purposes.
1. To survey the adequacy of existing sources of revenue available to Lokoja local government
2. To identify internal and external controls made by Lokoja local government in managing it funds
3. Examine the loopholes in the administration of funds management in Lokoja local government and
4. Base on (i-iii) above suggest ways and means of eliminating the problems, where they exist in the fund management of Lokoja local government.
1.4 RESEARCH HYPOTHESES
For the purpose of this research work, null hypothesis and an alternative hypothesis will be used i.e. (Ho and Hi) respectively.
H0:there is no adequacy of existing sources of revenue available to Lokoja local government
H1: there is adequacy of existing sources of revenue available to Lokoja local government
H02:there is nointernal and external controls made by Lokoja local government in managing it funds
H2:there isinternal and external controls made by Lokoja local government in managing it funds
1.5 SIGNIFICANCE OF THE STUDY
The study of Lokoja local government financial management as survival of local government is significant in the sense that the research project identifies some untapped sources of revenue which will in the long run boost the financial base of the local government and make it less dependent on state and federal government supports.The admonished independence of local government is a reflection and it’s in turn by the admonished role of local sources of revenue in the administration of this revenue as problem area is identified and possible. Suggestions are advanced minimize if not to eradicate these identified problems.The study is equally important financial resources in the local who harness and allocated financial to resources in the local government in order to enhance the standard of living of the local citizens.
1.6 SCOPE AND LIMITATION OF THE STUDY
This project work is an attempt to critically evaluate the challenges of fund management in local government (A case study of Lokoja local government area). In the course of carrying this research work, the researcher faced a lot of problems which limited the study. They include the following:
1. Time frame
2. Financial resources
3. Material resources
TIME FRAME: The researcher being a student has a lot of activities in school so the only function of the time he has apportioned to the research work, so the research was limited to the extent of the time research was able to devote for it.
FINANCIAL RESOURCES: Also limiting factor of this research was financial resources of the residence and the venue of the case study being student (the researcher) was faced with the problem of transportation fees most time. In addition expenses also include the purchase of stationeries photocopy and other necessary expenses related to the research work. Therefore, the research was limited to the amount of resources within the research reach.
DEFINITION OF TERMS
In an academic research of this nature, it usually uses to define some key concepts, which would be used in the course of the study. This is because it helps to carry the reader along the following terms are therefore defined as they are used in the context of this study.
LOCAL GOVERNMENT: Barber (1970) defined local government as ‘’authority to determine and execute within a restricted area inside and small that the whole state’’.
In the same vein, the guideline for local government reform of (1979) defined local government as the ‘’government establishment by law of the exercise specific power within defined areas’’.
FUND: May be defined as change in cash and change in working capital
DEVELOPMENT: Development is defined as the act process result or state of developed which in turn lead to advance to promote the growth of to further improve or to enhance something.
SOURCES: According to Advance Dictionary defined the word ‘’source’’ is the place person form which something comes or is got from.
GENERATION: The word generation connotes the contents of producing or derives in form of collection or accumulation. The particular function of this word is use in the content of this project to produce, collect, accumulate through possible means.
SUBVENTION: An amount of money given to support an organization, industry public corporation and government level.
ADMINISTRATIVE: The word administration is derived from Latin word ‘’administer’’ which mean to case for or look after people to manage affairs. Administration is universal process permeating all collective effort, be it public directed toward the realization of consciously laid down objectives.
BUDGET: A budget is defined as a conscious prepared in advance, relating to future period of a time base on forecast of key variable adopted to achieve wish to contain policy of an objective.
1.8 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows
Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study